Exclusive: Local Infusion bags $4M in Brand Foundry-led seed round
Local Infusion, a tech-enabled ambulatory infusion center (AIC) startup, is emerging from stealth with a $4 million seed led by Brand Foundry Ventures and Meridian Street Capital, founder Woody Baum tells Sarah.
Why it matters: The demand for infusion care outside of the hospital is accelerating, calling for more innovation around patient experience because people with chronic conditions often require treatment for multiple years at a time.
- Investment into the AIC sector has been accelerating, but the focus is largely on filling up the capacity gap in a low-cost manner, Baum says.
Zoom in: Affordability is important but just one piece of the equation.
- Whereas consumer-focused specialties like dental are powered by technology making for a more seamless user experience, "referral-based health care practices have lagged behind," Baum says. "It takes a little longer to change those patterns."
How it works: Local Infusion says it will treat patients with chronic autoimmune diseases on specialty medications within private, comfortable suites.
- It aims to harness digital tools and technology to improve the treatment process, starting by simplifying what are typically lengthy referral and onboarding processes.
- It offers a dedicated infusion guide to answer questions throughout treatment — around both the care plan and billing.
The big picture: Baum sees an opportunity to leverage the powerful relationship AICs build with patients into a care coordination model.
- "We have this ability to capture these patients, develop relationships with them, and act as an extension of their primary care providers," Baum says. "I don't want to just compete on being the lowest-cost provider."
What's next: The seed funding will be used to build out Local Infusion's tech team and support the launch of its first five clinics, which are intentionally situated in areas Baum says are facing a massive access problem — Maine and New Hampshire.
- In both states, the cost differential is among the nation's highest between between the status quo — what the hospital is charging — and what Local Infusion can charge, Baum says.
- Five locations are poised to open in those states by early next year, starting with its debut clinic in Concord, New Hampshire, in December.
- Local Infusion will follow with new clinics in Connecticut, New York and New Jersey in 2023 and 2024, Baum says.
The backstory: Baum, an investment banker early in his career, recognized how antiquated the AIC model was from a tech and patient experience perspective via his previous role as CEO of OI Infusion, an in-office infusion center management company.
- Local Infusion hired former Kindbody product development specialist Tina Liu as head of product and Ashley Knapp, former McKesson Intrafusion infusion nurse and clinical manager, as head of sales.
State of play
Investors are flocking to infusion care, as payors call for more affordable options and patients demand quality and convenience in a large and growing market. In other activity...
- Novo Holdings in September agreed to acquire Pritzker Private Capital's KabaFusion, a home infusion company specializing in intravenous immunoglobulin (IVIG), at a $1 billion-plus valuation, sources told Axios.
- Frontline Healthcare Partners in August invested into Scottsdale-based AIC LivWell Infusions.
- Heritage Group in July made a growth equity investment in TwelveStone Health Partners to grow its infusion center platform.
- InTandem Capital Partners in March launched Denver-based Vivo Infusion via simultaneous investments in AIC businesses MPP Infusion Centers and ID Consultants.
- One Equity Partners in January invested in Fairfield, New Jersey-based InfuCare Rx.
- Oak HC/FT in November 2021 led a $50 million funding into Infusion for Health, a Southern California-centric AIC platform.
- Great Hill in September 2021 injected a $100 million growth investment into IVX Health, an AIC network also backed by Linden Structured Capital, McKesson Ventures, and others. (Linden Capital also owns Vital Care)
- Waud Capital in August 2021 bought PromptCare, which comprises an in-home infusion therapy business and complex respiratory business. The same month River Cities Capital invested into Oklahoma City-based AIC FlexCare Infusion Centers.